Digest – March 18 2010

Adrian Russell’s Examiner column is the only sports journalism I’m reading these days. Such a good writer, love how he meanders but always finds home. This week he talks about sports-writing itself, and its future. Chalk it down, boi.

A young man is stabbed to death in his own neighbourhood for being the wrong colour and for a short while there’s the scurry of activity; activity aimed at keeping everybody calm and assuring us all that the crime was an anomaly – one of those freak accidents that in no way reflect the state of society. Yes, the affected community should remain calm. Those affected should let the authorities deal with the matter. But what about the rest of us? Why are the unaffected so good at shrugging our shoulders and getting on with things? Why do those who are distant enough to be both angry and constructive not act, or speak, or do something other than shrug their shoulders and move on?

[…] To what end? Maybe I’m just haunted by the ghost of Zimbabwe past, but I’ve seen this same passivity before. I’ve seen what happens to a house so accepting and forgiving of rot. Eventually, it falls apart. Even if it is a house of stone.

The Government’s deflationary policies are devised to increase ‘competitiveness’ and ‘create’ jobs, but who is going to take up these high-skilled jobs? Sunday Tribune feature on a generation saying bye-bye.

Mark Davenport of the BBC is a great example of how political correspondents can be bloggers without sacrificing the public perception of balance. Recommended reading for all the background stuff in Northern Irish political and media life. Latest post is here. Another nice one earlier in the week too. Not to staid to have a bit of craic either.

So, even if Greece and other PIIGS had the political resolve to reduce massively their large fiscal deficits – and that is a big if, given the political resistance to spending cuts and tax increases – fiscal contraction may, at least in the short run, make the current recession worse as higher taxes and lower spending reduce aggregate demand. If GDP falls, achieving a certain deficit and debt target (as a share of GDP) becomes impossible. This, indeed, was the debt death trap that engulfed Argentina between 1998 and 2001.

Restoring sustained growth requires real currency depreciation. There are only three ways that this can occur. One is deflation that reduces prices and wages by 20-30%. But deflation is associated with persistent recession (see Argentina again), and no country’s society and political system can accept years of recession and fiscal austerity to achieve real depreciation. Default and an exit from the euro would occur well before that…

Either Goldman’s executives were well aware of the “Fab” and its implications – in which case they face serious potential criminal and civil penalties – or they did not have effective control over transactions that posed significant operational and financial risk to their organization.

They will undoubtedly pursue the “we did not know” defense – which of course debunks entirely the position taken by Gerry Corrigan (of Goldman and formerly head of the NY Fed) when I pressed him before the Senate Banking Committee in February. Corrigan claimed that Goldman’s risk management system is the best in the business and simply superb; the former may be true, but the latter claim will be blown up by Lloyd Blankfein’s own lawyers – they must, in order to keep him out of jail

OTHER

If one good thing has come out of the whole ash thingie, it’s this photo. Jesus. It’s from Getty but I can’t find a link.